Coordinated Funding for Nonprofits—Good or Bad?

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October 1, 2010; Ann Arbor Chronicle | In Washtenaw County (Ann Arbor), Michigan, the United Way, the Community Foundation, the City of Ann Arbor, the County government, and the consortium of 11 other local governments are talking about coordinating their $5 million in funding for human services nonprofits. They have proposed a two-year pilot project to coordinate their funding around six priority issues—housing/homelessness, aging, school-aged youth, children from birth to six, health, and food.

Observers have raised a number of questions about how this coordinated funding program would work: What happens to nonprofits that used to be funded by these entities but don’t provide services in the six priority areas? Will this work to the advantage of larger, well-established nonprofits and therefore discriminate against new or small nonprofits? And how will the different organizational cultures of the United Way, the community foundations, and the governmental agencies blend together?


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Each of the priority areas will have a planning group that will make recommendations about needed services, for example the Blueprint for Aging consortium would identify the needs of senior citizens and the Washtenaw Housing Alliance would identify the needs of housing and homelessness issues; other planning groups would be the Food Gatherers, the Washtenaw Alliance for Children and Youth, and Washtenaw Success by 6.

The article isn’t clear about how the funding decisions will be made after receiving the service analysis needs from the planning groups, but it appears that the Ann Arbor Office of Community Development will be playing the lead coordinating role as it currently does for the public sector funders. The director of OCD hinted that nonprofits might not be the only mechanisms used by the consortium to deliver services. “They are not the be all and end all,” she said, indicating that some services might be delivered by “partnerships.”

The Washtenaw funding consortium has more reviews to undergo before it becomes operational in July 2011. There is a long history in the community development field of funder collaboratives, mostly from the foundation and corporate side, occasionally funds from the public sector will also be included. The Ann Arbor area is talking about community development and human services, though with only two large institutional funders (the community foundation and the United Way) as opposed to the multiple private foundations and corporate funders usually involved in community development collaboratives. The Ann Arbor people are thinking that their plan might be a national model. What do you think of this?—Rick Cohen

  • Jean Butzen

    I think this is a very interesting example of donors looking for pooled efficiencies and also, an attempt to transfer systems change to the nonprofit grantee sector. This is very ambitious and it appears that they are proceeding cautiously and with care to be sure they are adding value.